The best way to keep (not sell) a home when a homeowner has a temporary financial hardship is a forbearance plan.

A forbearance plan is an agreement made between a lender and the homeowner where the lender allows the homeowner to miss a couple of payments (or forgives a couple of already missed payments) and then requires the homeowner to make up the payments later - in most cases by making payment-and-a-half payments for several months in a row after the missed payments. The re-payment plan can be structured in several ways.

Advantages and Disadvantages

The advantage of pursuing a forbearance plan is that it can avoid foreclosure and keep a homeowner in a home that they really can afford – if they can just be given time to catch up on their payments.

The disadvantage to a forbearance plan is that most people are either not eligible for these plans, or those that are,are not able to ever catch up once the payment-and-a-half payments period begin. They just cannot afford the new or continued payments.

Forbearance plans, if approved, usually delay foreclosure but often don’t permanently prevent it. Before exploring this option, make sure you talk to a real estate professional about all of your options! Regardless of your situation, income, or equity, if you would like to discuss all of your options for selling your home quickly to avoid foreclosure, please CLICK HERE

Common Questions About Forbearance Plans

Question: Can anyone get a forbearance plan?

Answer: No, in most cases the lender will have to review each homeowner's individual circumstance to see if they are eligible. If you miss payments causing a hardship due to a temporary situation (such as a one-time rough spot like a temporary job loss that is now over), then you are more likely to be eligible and the program probably makes sense. If, however, your financial hardship is on-going (such as a loss of income that has not been replaced), a forbearance plan probably won't be approved, and won't do any good anyway. In these situations, other selling options are often better.